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Published on August 30, 2007

The insurer has lowered its equity investment in Thai stocks from 12 per cent early this year to 7 per cent recently.

President Wilf Blackburn said that with financial strength from good profits - Bt1.05-billion pre-tax profit from last year and 67-per-cent sales growth for the first half of 2007 - the insurer could afford to be more "adventurous" with its investments.

Sitting atop Bt75 billion, AACP has recently profited from cashing out earlier from the stock exchange, just before share prices worldwide tumbled as a result of the sub-prime mortgage debacle in the United States. And because of the company's lack of exposure to investments abroad, AACP was spared the wrath that has devastated many financial institutions.

Usually, the insurer has curved its equity-investment ceiling at 8 per cent of its investment portfolio.

Recently, authorities allowed local insurance companies to invest no more than 8.5 per cent of their investment portfolios in overseas stocks.

While Blackburn did not completely rule out the possibility of AACP investing abroad, he said the company would continue to concentrate on domestic equities.

Investing in overseas stocks may incur currency-exchange liabilities, said Blackburn. In addition, AACP has been active in issuing loans to local enterprises, an area where the company has plenty of experience and knowledge.

Thailand's third-largest insurance company will soon issue a new capital-guarantee product, this time linking the investment with stock indices from the high-growth BRIC countries - Brazil, Russia, India and China.

Blackburn was not able to reveal any more details until the product is launched this Sunday. Normally, the company would try to limit its structured-notes exposure to Bt100 million-Bt200 million per lot.

Blackburn also welcomes the new regulation that will force insurance companies to become public, but not necessarily listed on the bourse, believing that it will bring more transparency and more professional management. The time frame was set at eight years and companies that fail to convert will be barred from expanding their businesses.

As AACP's investment portfolio gains in volume - Bt100 billion by the end of next year - Blackburn hopes to attract more fund-management talents.

 Ki Nan Tsui

 The Nation